By Scott Meacham
Copyright © 2017, The Oklahoma Publishing Company
As a fourth-generation attorney, I can’t help my evidentiary mindset. I want the facts to tell the story; I look to the data to prove the case.
That’s why I feel like titling my next series of columns “Just How Much Proof Does Oklahoma Need?”
Proof of what, you might ask. Given my earlier columns, especially the pieces from about this time last year, you might think I’d be arguing about what a mistake it is for Oklahoma to reduce funding to agencies and programs that expand the innovation economy, and thereby economic diversification in this state.
And you would be right. I will ultimately again be arguing against those sorts of cuts, should the Legislature take a similar approach in the upcoming budgeting cycle.
But for now, I want to argue from the other position. I want point out the proof that Oklahoma is doing the right things when it comes to economic diversity and new advanced technology company creation — maybe not as fast or fully as we could — but we are on the right course. Oklahoma is diversifying our economy.
Thirty years ago, when legislative and business leaders first envisioned the Oklahoma Center for the Advancement of Science and Technology (OCAST) as the driver of innovation to diversify and strengthen Oklahoma’s economy, one in every 11 jobs in Oklahoma was linked to oil and gas. Today that number is one in 24.
i2E Inc. has been in operation for 18 of those 30 years. We’ve provided expertise and funding to more than 675 of Oklahoma’s emerging small businesses. Now that we have $50 million of investment capital under management, we can serve these young companies in all phases of the business cycle — from concept to expansion of product and markets — and jobs.
As great as it is to have the capital to help companies grow, we all need to remember that our pipeline for wealth and job creation starts with concept-stage companies, the earliest and riskiest type of firms, not with eventual exits like we recently experienced with Selexys and WeGoLook.
Through the TBFP (Technology Business Finance Program) Concept Fund, we’ve made investment of $11.8 million in 119 startups, with repayments totaling $5.8 million — about 50 percent. The failure rate of concept-stage startups is typically about 70 percent. TBFP, wrapped with venture advisory services, at a 50 percent payback, has proved that Oklahoma can beat those odds.
Venture capitalists don’t invest in concept-stage deals, so there is another proof point that what we are doing works. With the TBFP Fund, Oklahoma stepped up to fill the gap, but TBFP by itself wouldn’t have been enough. For every TBFP dollar invested by the state, i2E clients have raised more than $45 dollars in private capital.
When angel and other accredited investors step up to help fund startups at the early stage, it has a ripple effect. i2E’s full portfolio of Oklahoma-based companies has attracted $590,762,531 in private investment from banks, venture capital funds, angel investors, and other strategic investors.
Oklahoma, how much more proof do we need?
Scott Meacham is president and CEO of i2E Inc., a nonprofit corporation that mentors many of the state’s technology-based startup companies. i2E receives state support from the Oklahoma Center for the Advancement of Science and Technology and is an integral part of Oklahoma’s Innovation Model. Contact Meacham at i2E_Comments@i2E.org.